The Next Step in Sustainability: Sustainable Supply Chain Management
By Susan Tinnish Advisory Group Chair, Vistage | May 18, 2014
Many enterprises in the hospitality and travel industry (hotels, restaurants, airlines, cruise ships) have taken steps to create programs focused on environmental sustainability. Initiatives within these programs have focused on consumer-facing efforts (e.g., towel reuse programs), as well as operational initiatives (e.g., reducing energy use or water usage). In some cases, organizations have focused on the social aspect of sustainability (e.g., Wyndham Hotel Group, Carlson Companies and Hilton Worldwide which have signed a code of conduct against human [child] trafficking).
As organizations consider their next steps for sustainable initiatives it is natural to focus on the company's supply chain. In other industrial segments like manufacturing or retail, the largest opportunity for improving sustainability performances such as reducing carbon emissions, water use, toxic chemicals and addressing social and human rights concerns is in its global supply chain. For example, up to 60 percent of a manufacturing company's carbon footprint is in its supply chain. For retailers, that figure is closer to 80 percent along with exposure to human rights and social issues (Ceres, n.d.).
The hospitality industry embodies unique characteristics that require examination of supply chain management under a different lens than manufacturing or retail entity. This article will introduce the topic of sustainable supply chain management, discuss those differences and discuss the "big" step that the hospitality industry can take toward a more sustainable supply chain.
The global nature of competition and desire to identify additional cost savings motivated a change in traditional "purchasing" to a focus on "supply chain management. In the 1980s, manufacturers and retailers realized they could benefit from collaborative relationships versus adversarial "purchasing" relationships with their suppliers. Companies began to realize that they could no longer effectively compete in isolation of their suppliers and other entities in the supply. Additionally, work on supply chain management has been inspired by many tangential issues including quality management, advances in technology, notions of materials management and integrated logistics, and a focus on industrial markets and networks.
Defining terms is useful at this juncture. Supply chain activities focus on product development, sourcing, production, and logistics, as well as the information systems needed to coordinate these activities (Handfield, 2011).